On another note
- Thread starter PSU4U
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What is this program, some type of private investment funding with revenue sharing?
Doesn’t sound like a good long run strategy with the rapidly escalating revenues . It’s a sales pitch like Tom Selleck on a reverse mortgage commercial .
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Between this and Adidas, PSU will be swimming in cash money!
Let’s not forget tens of millions in would-be buyout money freeing up as soon as Franklin signs with Va Tech!
Boom times are a-comin for Kraft and the athletic department! I’m sure we’ll soon have THE most desirable and highest-paid coach in all of CFB, plus there’ll be regular BWICAC stipend checks coming our way.
Terrible idea for the Big 10. Private equity ruins everything eventually.
I think we read the same story, but tOSU is still in the yea camp and the deal may proceed without Michiganistan and the Spoiled Children. They may even give the two no votes a 3-6 month grace period to change their minds. Considering that the Cheaterines would be one of the big three payout recipients, with tOSU and PSU, but USC is not considered one of the top three, I could see USC being a holdout.
I have no idea about this. Details?
- Who is offering the $ ?
- How long is this deal ?
- What control are the universities and/or B1G giving up over to the "investors" ?
Won't some of that Franklin buyout payback need to be put toward the mega stadium renovation? Oh, I forgot ticket, seat/suite fees, concession, and parking fees will be even more exorbitant.
Seems that way to me but I know very little about high finance private equity other than when they take over businesses it's usually bad news and they suck the life blood out and move on to the next "deal", leaving people in their wake.
No vote on Big Ten capital deal; some urge caution
A decision on the Big Ten's proposed private capital deal does not appear imminent in the wake of a Thursday meeting of the league's presidents and chancellors. Some critics of the proposal labeled it as "reckless" and urged caution before proceeding.
www.espn.com
Michigan recruited USC to the no vote collum when Petitti was testing the waters prior to a vote. Then the vote was put off until this month. Rat Bastards.
Pretty much. This pension fund is making a sizeable investment in cash today in exchange for future payouts.
It's simple finance. Both sides can run the numbers. If both sides think it's a good deal financially, then someone is likely wrong. That's what bothers me. That said, several B10 athletic departments are pretty desperate for cash. Not sure if this will fix their long term problems though.
I have no idea about this. Details?
UC investment systems based in Cali they have 2 billion in assets. Offering is 10yrs? Last question is the million dollar question. But one thing you can be assure of is once this deal is made League Expansion will happen fairly quickly. Virtually ever league is pursuing something similar.
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That's precisely the problem, PE investments are temporary. These investors enter the agreements with their own plans to realize some ROI and then they leave. Thye don't give a damn about the long term impacts of whatever decisions they make, as long as they get their ROI and it's a win in their book, even if things turn to complete $h!t after they exit, as they often do.
The Genie is so out of the bottle in so many ways that this will also happen eventually. This is just the next logical step from becoming/staying superior to the NFL product. College Football to be King.
I think Michigan did their due diligence and like they said, the ACC made a grave mistake with their long term deal.No vote on Big Ten capital deal; some urge caution
A decision on the Big Ten's proposed private capital deal does not appear imminent in the wake of a Thursday meeting of the league's presidents and chancellors. Some critics of the proposal labeled it as "reckless" and urged caution before proceeding.
This deal would mean trouble in the long term.
Time for these athletic departments to bite the bullet and cut unnecessary staff and look for other cost savings. Work within the current framework of the $20.5 million from NCAA settlement and the existing media rights deal along with the revenue from tickets, fees, concessions, and parking.
I agree with the UM Regents, it amounts "to a payday loan". Not a good business deal.
The $20.5 million is a cash outflow, the amount schools can pay athletes from their own funds. Look at it as a salary cap. Over/under on when it gets breached?
m.knox summed it up pretty damn well.
Or, as one U Michigan Trustee summarized it: "It's a payday loan".
The information is out there, and easy enough to find - and it is not a difficult analysis to conclude that it is a VERY bad long-term deal for the Big Ten (why anyone would suspect otherwise is incredibly obtuse).
In essence, a chunk of cash now, in return for sizable forfeiture of Big Ten revenues for decades to come.
That said, as terrible as this deal would be for the Big Ten, I would expect it is more likely than not to go through.
Why?
Simple:
Many programs, not just PSU, have placed themselves into significantly dire fiscal futures wrt athletics - fiscal concerns that are looming within the next several years. None - I don't think - as severely as PSU - largely due to the Beaver Stadium bit - but many in similar troubles. (I think I posted the analysis of PSU's athletics fiscal cliff. In any event, PSU has around 5 years before the worm turns) A cash infusion now kicks the can down the road (they hope) - while making the fall, when it does come, doubly precipitous.
It is what it is.
Or, as one U Michigan Trustee summarized it: "It's a payday loan".
The information is out there, and easy enough to find - and it is not a difficult analysis to conclude that it is a VERY bad long-term deal for the Big Ten (why anyone would suspect otherwise is incredibly obtuse).
In essence, a chunk of cash now, in return for sizable forfeiture of Big Ten revenues for decades to come.
That said, as terrible as this deal would be for the Big Ten, I would expect it is more likely than not to go through.
Why?
Simple:
Many programs, not just PSU, have placed themselves into significantly dire fiscal futures wrt athletics - fiscal concerns that are looming within the next several years. None - I don't think - as severely as PSU - largely due to the Beaver Stadium bit - but many in similar troubles. (I think I posted the analysis of PSU's athletics fiscal cliff. In any event, PSU has around 5 years before the worm turns) A cash infusion now kicks the can down the road (they hope) - while making the fall, when it does come, doubly precipitous.
It is what it is.
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The other simple answer...because they can get a chunk of $ now to make their lives easier and look good when it comes time for bonuses/raises, while they'll be gone by the time the next guys deal with the aftermath.
I am finding it hard to imagine how PE can do anything worse than the direction college football is already headed. Care to indulge in how you think PE can make things worse?
It all depends how the investors plan to get their investment and profit out of the deal. But they definitely will get it at some point, regardless of what it does to the conference after they exit and move on to their next investment.
The richest programs are against it. So that’s a big hint that it’s a money grab. And then there’s this -
Senator warns Big Ten of private equity risks
Senator Maria Cantwell sent a letter on Friday warning Big Ten presidents that a move into private equity could have negative consequences, including impacting the schools' tax-exempt status.
www.espn.com
I would not think signing up for PE deals is wise. With the shift away from 4 year schools and the stricter standards on federal loans (which I think will continue under this administration). The big 10 will eventually get a bill they can’t pay back. Then they’ll be slashing budgets to make debt and interest payments
Well, first of all, it doesn't matter if you call it PE or whatever label one puts on it. The proposed deal is the deal, whatever the label.
That said, since it is an additional unique event, that HAS to either "make things better or worse" - and since it is a slow-motion train wreck in the making - it really ain't hard to imagine how it "makes things worse". Not at all. In fact, it is hard to "unsee" once you take a critical look.